The Bank of Canada announced today that it is keeping its key rate unchanged, noting that the global economy appears to be stabilizing with growth expected to edge higher in the coming years, although uncertainty relating to ongoing trade conflicts continues to be a risk. A resilient Canadian economy, with investment spending stronger than expected, has allowed the Bank to hold rates while many other countries have eased. Going forward the Bank’s rate decisions will be guided by negative impacts of trade conflicts against our sources of economic strength, which are consumer spending and housing.
The next rate-setting day is Wednesday, January 22nd.
Be sure to get in touch if you have questions about your mortgage strategy. It’s important to get advice and a personal assessment of your situation if you need a new mortgage, are renewing, looking to refinance for debt consolidation, renovations or other large expenditures.
We regularly receive short-term rate promotions that are not posted online, which means our rates change frequently. Please contact us for these unpublished rate specials.
|Terms||Posted Rates||Our Rates|
Insured mortgage rates, subject to change. Conventional and refinance rates may be higher.
Some rates may not be available in all provinces. Consult a local Invis professional for more information. OAC. E&EO
|5 yr variable||2.90%|
Crunch the numbers and explore different scenarios with our website calculators.
Whether old or new, a home is an investment worth protecting.
“The difference between a house the owner has paid attention to and one they have not can be amazing,” said Mike Becker, a home inspector for Calgary and surrounding areas with Pillar to Post Home Inspectors.
Homeowners can maintain the value of their investment by monitoring these areas of the home:
1. Property and Site
- Drainage must move away from the structure.
- Monitor during snow melts and heavy rain.
- Most newer lots require some regrading once they settle, sometimes five to 10 years out, but always monitor.
- Repairs = $3 to $6 per square foot.
- Implement a regular maintenance schedule for shingles and flashings after five years.
- Characteristics of shingles near the end of usefulness: curling up, rounded edges and granule surface wearing off.
- Caulking usually lasts three to five years and should be refreshed.
- Inspect after severe weather.
- Gutter cleaning = $150 to $300.
- Gutter replacement = $7 to $9 per linear foot.
- Asphalt replacement = $3 to $7 per square foot.
- Loose or incorrectly fitted siding around openings, where moisture can reach the structure or wind might blow siding off. Seal holes with caulking and replace damaged pieces.
- Exterior penetrations, such as those around gas lines/meters and furnace venting, require yearly re-caulking.
- Repairs = $5 to $6 per square foot.
- Replacement can be more economical than repair costs.
- Condensation from the living area can build up and stain the ceiling, or worse. • Check for condensation when it’s cold outside. Look for signs of frost on the sheathing or around the attic hatch.
- Over time, attic insulation can lose volume, reducing its R value. Improve thermal efficiency by adding more insulation.
- Insulation = $2 to $5 per square foot.
- Doors not opening and closing properly anymore.
- Cracks in finishing might indicate structural problems, but don’t always require action. Monitor over time for possible moisture penetration or foundational movement.
- Mis-wired receptacles can damage electronics or cause shocks, sparks and/or fires.
- Professional installations should be maintenance-free unless something fails, like a ground fault circuit breaker/receptacle. These should be replaced.
- A very hot distribution panel might indicate problems. Don’t touch it, call an electrician.
- Repairs = $150 to $250 per hour, plus material costs.
- Prior to winter each year, Becker suggests opening the front panels to take a picture of the furnace for yearly comparison. Water or rust indicate it might be time for inspection.
- Yearly furnace cleaning is key to maximizing its life, Babisky says. “Clean the humidifier at the same time.”
- Replace filters every six months.
- After 10 years, implement a regular furnace maintenance schedule, with inspection by an HVAC professional.
- Annual service and cleaning = $250 to $500.
- Furnace replacement = $3,600 to $4,700.
- Leaks around slow-draining sinks, bathtubs and showers.
- Less available hot water or the pilot light repeatedly going out. Repairs can often add years to appliances.
- Water heaters typically last 10 to 15 years, but can fail at any time, usually unexpectedly.
- Repairs = $150 to $250 per hour, plus material costs.
- Water heater replacement = $800 to $1000.
As oversupply continues in Calgary’s housing market, December prices eased by one per cent compared to last month and are over three per cent below last December.
“Persistent weakness in the job market and changes in the lending market impacted sales activity in the resale market this year,” said CREB® chief economist Ann-Marie Lurie.
“This contributed to elevated supply in the resale market, resulting in price declines.”
December sales totalled 794 units, a 21 per cent decline over the previous year. Overall year-to-date sales in the city totalled 16,144 units. This is a 14 per cent decline over 2017 and nearly 20 per cent below long-term averages.
Inventory levels in December sat at 4,904 units. This is well above levels recorded last year and 30 per cent above typical levels for the month. Elevated resale inventories in 2018 were caused by gains in the detached and attached sectors.
Throughout 2018, the months of supply remained elevated and averaged 5.2 months. This contributed to the annual average benchmark price decline of 1.5 per cent. Price declines occurred across all product types and have caused citywide figures to remain over nine per cent below the monthly highs recorded in 2014.
“Both buyers and sellers faced adjustments in expectations this year. Sellers had to compete with more choice in the resale market, but also the new-home market,” said CREB® president Tom Westcott.
“With less people looking for a home, it became a choice between delaying when to sell or adjusting the sale price. However, buyers looking for more affordable product did not find the same price adjustments that existed in some of the higher price ranges.”
HOUSING MARKET FACTS
- Detached sales declined across all districts in 2018. With citywide sales of 9,945 units, activity remains 21 per cent below typical levels for the year.
- Detached inventories were higher than last year’s levels for each month of the year, including December. Slow sales caused the market to be oversupplied through most of 2018.
- Detached benchmark prices totalled $481,400 in December, a one per cent decline over last month and a three per cent decline over last year. Overall, 2018 prices declined by 1.5 per cent compared to last year.
- Prices have eased across most districts in 2018. The largest declines this year have occurred in the North East, North West and North districts.
- Apartment sales totalled 2,663 units in 2018. While the decline is less than other product types, levels are 22 per cent below long-term averages.
- The apartment condominium sector has struggled with oversupply for almost three years and 2018 was no exception.
- However, supply has been easing, as inventories this year averaged 1,584 units, one per cent below last year’s levels.
- Despite slowing supply growth, the market remained oversupplied, causing further price declines. In December, benchmark prices were $251,500, over two per cent below last year. Annually, prices have declined by nearly three per cent for a total decline of 14 per cent since 2014.
- Price declines this year have ranged from a high of nearly six per cent in the East district to a low of two per cent in both the City Centre and North West districts.
- Declines for both row and semi-detached product resulted in 2018 attached sales of 3,536 units, a 15 per cent decline over the previous year and 14 per cent below long-term averages.
- Slower sales activity prompted some pull-back in new listings, but this was limited to the row sector. Row new listings declined by four per cent and semi-detached new listings rose by nearly 15 per cent in 2018.
- Despite some adjustments to new listings, inventory levels remained elevated, keeping the market in buyers’ market territory and putting downward pressure on prices.
- In December, the semi-detached benchmark price totalled $397,500. This is a monthly and year-over-year decline of 0.8 and 3.8 per cent, respectively. Recent price declines have caused this sector to erase any of the gains that occurred last year, as 2018 prices remain just below 2017 levels. Overall, annual prices remain 1.4 per cent below 2014 peak levels.
- Row prices have also been edging down. As of December, row prices were $288,400, a 1.5 per cent decline from last month and nearly four per cent below last year’s levels. Overall, 2018 prices remain two per cent below last year’s levels and nearly 10 per cent below previous highs.
REGIONAL MARKET FACTS
- In 2018, the Airdrie housing market was distinctly marked by oversupply and signs of buyers’ market conditions. Compared to last year, inventory levels and months of supply have been significantly higher, combined with lower levels of sales. This has led to downward pressures on the benchmark price for detached homes.
- Annual residential sales exhibited a year-over-year decline of 14 per cent and were almost 19 per cent lower than activity over the past 5 years. This consistent decline was observed across all product types.
- Supply in 2018 was at record-high levels, with new listings achieving a new year-to-date peak for most of the year. Inventories have also been continuously increasing throughout this year and are 12 per cent higher than in 2017. Months of supply have increased steadily and averaged 5.6 months in 2018.
- Persistent oversupply has resulted in a decline in Airdrie prices. In 2018 detached benchmark prices averaged $369,042, over two percent below last year
- Declining by 64 units, 2018 sales in Cochrane were lower than the previous year. However, an annual count of 599 sales remains comparable to activity over the past three years.
- In 2018 there were 1,288 new listings, the highest on record. Elevated new listings and easing sales resulted in rising inventories and months of supply that averaged nearly 7 months.
- Elevated supply has caused detached prices to trend down over the second half of the year, however, it was not enough to offset earlier gains. In 2018, detached benchmark prices have remained comparable to last year.
- 2018 residential sales in Okotoks were 463 units, a decline over last year and comparable to 2010 activity.
- Gains in new listings combined with slower sales resulted in rising inventory and excess supply in this market.
- Despite increased supply and weak sales, detached home prices in Okotoks showed modest increases in 2018. The average detached benchmark price totalled $434,875, which is one per cent higher than last year.
This handy quick reference tool provides helpful information to submit applications to CMHC for homeowner and small rental loans, for all CMHC programs: Purchase, Improvement, Newcomers, Self-Employed, Green Home, Portability, and Income Property.
Benefits of mortgage insurance
Some of the benefits of CMHC mortgage loan insurance include:
- Available for purchase of an existing residential property with or without improvements and for new construction financing.
- Our Green Home program offers a partial mortgage loan insurance premium refund of up to 25%. Refunds are available directly to borrowers who buy, build or renovate for energy efficiency using CMHC-insured financing. Find out more with our Green Home Program.
- Self-employed borrowers with documentation to support their income have access to CMHC mortgage loan insurance.
- Our portability feature saves money for repeat users of mortgage loan insurance by reducing or eliminating the premium payable on the new insured loan for the purchase of a subsequent home.
Loan-to-Value (LTV) ratios
For homeowner loans (owner-occupied properties), the Loan-to-Value ratio for 1–2 units is up to 95% LTV. For 3–4 units, the ratio is up to 90% LTV.
For small rental loans (non-owner occupied), the ratio is up to 80% LTV.
Minimum equity requirements
For homeowner loans, the minimum equity requirement for 1–2 units is 5% of the first $500,000 of lending value and 10% of the remainder of the lending value. For 3–4 units, the minimum equity requirement is 10%.
For small rental loans, the minimum equity requirement is 20%.
Purchase price / lending value, amortization and location
For both homeowner and small rental loans, the maximum purchase price / lending value or as-improved property value must be below $1,000,000.
The maximum amortization period is 25 years.
The property must be located in Canada and must be suitable and available for full-time, year-round occupancy. The property must also have year-round access including homes located on an island (via a vehicular bridge or ferry).
Traditional and non-traditional down payments
A traditional down payment comes from sources such as savings, the sale of a property, or a non-repayable financial gift from a relative.
A non-traditional down payment must be arm’s length and not tied to the purchase and sale of the property, either directly or indirectly such as unsecured personal loans or unsecured lines of credit. Non-traditional down payments are available for 1–2 units, with 90.01% to 95% LTV, with a recommended minimum credit score of 650.
At least one borrower (or guarantor) must have a minimum credit score of 600. In certain circumstances, a higher recommended minimum credit score may be required. CMHC may consider alternative methods of establishing creditworthiness for borrowers without a credit history.
Debt service guidelines
The standard threshold is GDS 35% / TDS 42%. The maximum threshold is GDS 39% / TDS 44% (recommended minimum credit score of 680). CMHC considers the strength of the overall mortgage loan insurance application including the recommended minimum credit scores.
The GDS and TDS ratios must be calculated using an interest rate which is the greater of the contract interest rate or the Bank of Canada’s 5-year conventional mortgage interest rate.
Single advances include improvement costs less than or equal to 10% of the as-improved value.
Progress advances include new construction financing or improvement costs greater than 10% of the as-improved value. With Full Service, CMHC validates up to 4 consecutive advances at no cost. For Basic Service, the Lender validates advances without pre-approval from CMHC.
Non-permanent residents (homeowner loans only)
Non-permanent residents must be legally authorized to work in Canada (i.e. a work permit). Mortgage loan insurance is only available for non-permanent residents for homeowner loans for 1 unit, up to 90% LTV, with a down payment from traditional sources.
Samantha Brookes has been warning Canadians to take a close look at the clauses in their mortgage contracts for years, but her refrain has become a bit more prevalent in recent months.
Since the Office of the Superintendent of Financial Institutions’ mortgage stress test was implemented in January, the founder of the Mortgages of Canada brokerage has seen “a huge influx” of Canadians who fail to qualify for a bank mortgage turning to alternative lenders that range from risky loan sharks to larger, more conventional companies like Home Trust.
While alternative lenders can provide a lifeline for Canadians who have run out of other financing options, Brookes said they come with pitfalls for those who don’t bother looking at the fine print.
“You need to read those contracts,” she said. “(With an alternative lender), the interest rates are higher, the qualifying rate is higher than if you were going with a traditional bank and they are going to charge one per cent of the mortgage amount (as a lender’s fee) for closing, so that means your closing costs increase.”
Alternative lenders tend to offer less wiggle room on their terms, so Brookes said that means you should pay special attention to another dangerous term she’s seen slipped into mortgage contracts: the sale-only clause.
It’s less common, Brookes said, but if left in, it might mean the only way you can break your mortgage is by selling your home. She usually makes sure it’s nixed from her clients contracts immediately.
She also advises mortgage-seekers to research a potential lender’s reputation, which can easily be done online. Looking up some lenders will reveal their involvement in growing strings of court cases, she said.
“If they are constantly in court fighting with consumers for money, are you willing to put yourself at risk with that kind of person?” Brookes recommended asking yourself.
Still, she said alternative lenders “that don’t end up in court every two seconds” are out there and can offer a good mortgage, if you do your research.
Broker Ron Alphonso has seen what happens when you don’t look into your lender. He recently heard from a couple who borrowed $100,000 via a paralegal posing as a broker, who then convinced the couple to give the money back to him so he could invest it on their behalf. Instead of investing it, the paralegal disappeared to Sri Lanka with the funds, leaving the couple on the hook for the money and resulting in eviction from their home.
“They got very, very poor advice,” Alphonso said. “Apparently the person that arranged the mortgage was an agent and paralegal that has since been disbarred. If they had a lawyer working for them, at least the lawyer could have said (before they signed the mortgage) maybe this isn’t right.”
Alphonso recommends seeking advice from a broker, who he said should also be questioned about how tolerant a lender will be if you were to default on one of your payments.
Some lenders quickly force their clients into a power-of-sale or foreclosure, while others will find a way to work out an arrangement that will allow them to keep their home.
“If you are already in some kind of financial problem and you go to a lender that is not flexible, you make the situation worse,” Alphonso said. “If you miss one payment, (within) 15 days you can be in power-of-sale.”
When that happens, he often sees people refuse to leave their home and try to fight the power-of-sale or foreclosure. They take the matter to court and end up spending tens of thousands of dollars in legal fees that can eclipse any remaining equity they might have in their home.
If they lose their case, which Alphonso said happens often, they end up with a massive lawyer’s bill, no equity to cover it and no place to live.
That’s part of why he said those seeking financing should have an exit strategy to get out of any mortgages they sign with an alternative or private lender with a higher interest rate.
“Your goal should always be to get to a lower interest rate,” he said. “If they don’t go in with a true goal of how to get out of this private mortgage, there will be a problem down the road.”
Alphonso recommended looking for an open mortgage, where you can prepay any amount at any time without a compensation charge or a prepayment limit that you would often find in a closed mortgage.
Open mortgages come with higher interest rates, but give buyers the option to switch to a cheaper lender if something happens. However, switching does often come with penalties, he said.
Because some agents and brokers don’t give enough information or fully explain penalties and clauses, he said the best way to keep out of trouble when seeking a mortgage is to ask lots of questions and understand what you’re getting into before signing on the dotted line.
-TARA DESCHAMPS, Globe & Mail
Beginning April 1, 2018, if a consumer is buying a new condominium in Alberta from a developer – an Alberta lawyer must hold the buyer’s purchase deposit in trust while the condominium is being built. Service Alberta announced this change in October 2017.
Prior to April 1, a real estate brokerage or the condominium developer could hold a buyer’s deposit in trust.
Real estate professionals who are representing buyers during their purchase of a new condominium from a developer should confirm the developer uses a lawyer who is an active member of the Law Society of Alberta, and that they operate a trust account under the Legal Profession Act. You must also ensure your clients write their deposit cheques to the developer’s lawyer, in trust, and not to the developer or a real estate brokerage.
Under this new rule, a developer who receives a buyer’s deposit must ensure their lawyer deposits it in the lawyer’s trust account within three business days of receiving it. If the developer agrees, a buyer can have their own lawyer hold their deposit in trust.
Take a few minutes to review the Condominium Developer Info Sheet from Service Alberta for more information about additional Condominium Property Act changes coming on April 1.
Real Estate Council of Alberta
F: (403) 228-3065
Over the last two days we have talked about your Realtors networks and Passive vs. Active Marketing but there are a few things that you should know about listing your home that will set you up for success when you are ready to put your house on the market!
- Neat and Tidy
We know that you love your home, and you might have kids and kids can be messy, or maybe you have pets and sometimes pets smell. Realtors have homes, with all of these same things, I promise we don’t all live in pristine real estate marvels, in fact if you walk into my house I can promise you will be tripped by a hockey stick or a dog toy, BUT I cannot emphasize this enough, your home needs to be spotless for photos and for showings. it sucks, we all know this, it is hard to keep your home in show home shape, but it will not sell if it isn’t. Try and have it “show home” clean when you have your Realtor interview so that they can get a clear picture of what your home looks like on its best day!
2. Listen to your Lister
You are obviously going to have a conversation with your Realtor about the listing price of your home. Realtors have tools that they use to identify what your home should be listed at, these tools (called CMA, which we will talk about in a later post) combined with a savvy understanding of the current market conditions your Realtor can usually pin point pretty close what your home should be listed at and ultimately what it should sell for. One fatal flaw in home owners is that they don’t listen to this number, typically because they think their house is worth more. Some Realtors will push back because of knowledge and expertise, some will take the listing at a higher price tag, simply to get your listing… when this happens you can find yourself in a vortex of price dropping and haggling with offers when and if they come in. If your home is priced right (not too high or too low) it will sell. Don’t be afraid to ask questions about list price, but ultimately if your Realtor has stats to back the price point… take their advice.
3. Clear the Clutter
This is your home, of course you would have personal touches, nik naks and frames. maybe some crazy feature walls, or novelty rooster collections. We know you love these items, we do too. BUT potential buyers don’t. Most people when viewing a home cannot look past the esthetic and see true potential of their own items in a home, in fact they have the same problem with empty spaces. This is why a staged home will always sell faster 10/10 times. You can start this by packing up any personalized items and clutter. particularly toys, and collections, photos and other chachkeys that can be distracting for the potential buyer. Think of it as a head start on packing for your move out!
4. Be flexible and realistic
Thinking about upcoming showings can be overwhelming and daunting, but showings are good, they are the pass that takes you right to the touchdown, showings is where your offer will come from. The worst part; showings aren’t typically a 9:00-5:00 job. Now, this is still your home, you call the shots. It is really important that you are as flexible and realistic when setting schedules with your agent. If you have a 2 year old, maybe any showings after 7:00pm aren’t acceptable, maybe you need 24 hours notice before a showing, these are normal requests and completely acceptable! it is your home after all. Set clear expectations with your agent, but be mindful that if they call you and someone wants to see your house in the next 3 hours and you say no… that could have been the person who wanted to buy it.
5. Be patient, and communicate
If you have questions about your listing, the market, the last showing… the weather you need to know that you should be asking! Your agent should be keeping you informed about your listing, but if you’re not getting what you need, call them! Some agents even have review software that will generate feedback immediately following a showing, really good agents follow up with the buyers agent to try and close a deal, or at the very least find out why they didn’t choose your home, and the Great agents bring in their own buyers… from that network we talked about!
How important is marketing in Real Estate you ask? In short… it is incredibly important, in fact it can mean the difference between a sale and you sitting frustrated on your property for months, it can also be the difference in your listing becoming stale in the market because it sits for too long with little to no exposure.
I like to think that every Realtor has their own tips and tricks that they use to generate business, employ smart marketing techniques and do the very best for their client. The truth is, at the end of the day it breaks down to two types of agents. Active and Passive Marketers.
- Passive Marketing
Every Realtor does this, and some pawn it off as highly effective marketing tools, but at the end of the day they are waiting for the business to find them. Waiting for the buyer to call. Passive marketing is listing the home on MLS, putting it on a website, (that may or may not generate google ad words). There is nothing wrong with passive marketing, and every Realtor should do it because there is always the online buyer who shops around and can and will find you on MLS, but it isn’t exceeding expectations and it isn’t going above and beyond.
- Active Marketing
Active marketing is when the rubber meets the road. We talked in my previous post about Networksand this has a lot to do with that. Active marketing is when your Agent is actively searching the market for a buyer for your home. They can do this through their network, through lead capture services that they can deploy through various social media channels, and their website. Your Realtor should create a brand for your home. Does your Realtor use a professional photographer? are they a professional photographer? do they do home staging? what do they charge for home staging? All of these tools tie together and make your home sale something extra special, not just another MLS number on the proverbial YYC Real Estate shelf. Now, marketing costs money! The right kind of marketing costs lots of money! This is why you hire a Realtor, so you don’t have to navigate this alone. Always make sure to ask what the price tag is attached to any marketing plan when you are discussing commissions, offering photos and home staging is great, but ensure you know what that will cost you in the end. We will talk about where your money is going in a later post!
Kevin D’Costa Fun Fact! Did you know that I am an accredited staging professional RE. Did you also know that I offer this service to all of my clients? The best part, you rarely have to run out and buy thousands of dollars worth of furniture, usually just some minor esthetic and décor items are enough!
The point I am trying to make is this; When you’re interviewing a Realtor do not be afraid to ask them what exactly they are going to do for you? how are they going to market your home? Now that you know if you get the “I have a great webpage and I will list it on MLS” are the wrong answers, you can ask for more. expect more!
I have always received these questions, periodically, but lately it seems like almost daily I am asked “how do I choose the right realtor to sell my home”. I have always been an advocate of interviewing agents and ensuring that you have the right fit for you. You should never choose a Realtor without knowing and understanding how they are going to work for you! I am writing a part mini series that will include some insider tips on what to look for in a Realtor and very specific things to ask while you’re interviewing. Choosing someone to sell your home is a very important choice, I want to make sure you know what to look for!
A Realtors network is like a golden ticket. Most might think “The bigger the team and the fancier the website the quicker the sale” This isn’t necessarily true. Your realtor should have a network of potential buyers, sellers, Realtors, Mortgage professionals, lenders and brokers that work as a team to get the job done. Ask your Realtor about his or her professional network, you very well could be interviewing a Realtor that has a client just waiting to put an offer in on your home, they were simply waiting for that special something to come along. Real Estate professionals can’t work in silos, the biggest key to success in Real Estate is to have a respected group of people who you connect with regularly.
I recently did a study on first time home buyers in Alberta. 23% of those who responded said that they were not in the market to buy a home. The top reasons being 1. down payment and 2. Mortgage approval. As the study continued it became glaringly obvious that for MOST of this 23% home ownership was actually attainable, they simply were not educated or up to date on what options are available to them. My point here is this; Take **John and Susie for example. Looking for their dream home which is a 1200sq ft. front attached garage home in Windsong. They believed they would never qualify so they were waiting and saving… waiting… and saving. I had the opportunity to list a 1300sqft home in Windsong that would be PERFECT for this growing family. You guessed right… Because I have a trusted network of professionals we had their down payment sorted out, had them Mortgaged (with a pretty great rate to boot) and into this home. Their Mortgage payment is less than they were paying in rent and they OWN it! All of this they originally thought was unattainable. Now, This is a stellar example because Bob and Betty were able to sell their home before it even hit MLS for 24 hours and John and Susie were home owners, but not unrealistic with the right opportunity and the right network of Real Estate wizards working together! Every thing is impossible if you don’t try! Your Realtor should always try! with everything they have got! So when you’re interviewing, ask them this; “What does your professional network look like, and how are you going to step up to the plate for me?”
** Names and communities changed for privacy